National Debt and Deficit

A self-deluding person might choose to pretend some part of his or her expenses didn't really exist - credit card debt, for example. Some might think that our late investment banks did something similar. So does the United States government. In particular, it has a few tricks to make deficits appear smaller than they are, like considering some expenses off budget (Bush's wars) and money borrowed from Social Security and other trust funds. The annual deficit also depends on whether you use the fiscal year or the calendar year as a basis. For that reason, I like to just look at the gross National Debt, which the government tracks to the penny, day by day.

If you look at the chart in the first link, or the numbers from the second, you can see that there is only one period during the last twenty years when the debt actually decreased was a brief period correspondly roughly to Bill Clinton's last year in office. At the end of Clinton's last calendar year in office (12/29/2000 - Saturday's and Sunday's not computed), the National debt was $5,776 billion. At the end of the previous year, (12/31/1999) the debt was $5,776 billion - so the decrease for the period was $114 billion - a decrease of $400 or so for each American. Choose slightly different dates and the amounts can move fairly drastically.

Look next at the last year for which data exists: 16 Oct 2007 to 16 October 2008. During this period, the national debt increased from $9,058 billion to 10,333 billion - an astounding increase of $1.273 trillion. Nearly 13% of the total national debt was accumulated in the past year. 75% of the total national debt for all of American history was accumulated during just three Presidencies: Reagan, Bush I and Bush II.

UPDATE: A word or two about where all that new debt is going. Much of it is being used to lend money to banks that everybody else is afraid to lend money to. Some more is being used to buy stock in banks that the rest of the world is afraid to buy stock in. We are more likely to get some of it back than if we had bought another war with it or given it to a bunch of rich people.

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